BILL NUMBER: AB 114	CHAPTERED  07/26/99

	CHAPTER   165
	FILED WITH SECRETARY OF STATE   JULY 26, 1999
	APPROVED BY GOVERNOR   JULY 23, 1999
	PASSED THE SENATE   JULY 15, 1999
	PASSED THE ASSEMBLY   MAY 27, 1999
	AMENDED IN ASSEMBLY   APRIL 8, 1999

INTRODUCED BY   Assembly Members Florez and Briggs, and Senator Costa

                        JANUARY 4, 1999

   An act to amend Sections 17207 and 24347.5 of, and to add Sections
195.83, 195.84, and 195.85 to, the Revenue and Taxation Code,
relating to disaster relief, making an appropriation therefor, and
declaring the urgency thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 114, Florez.  Disaster relief:  freeze.
   Existing law authorizes a county board of supervisors to provide
by ordinance for the reassessment of property that is damaged or
destroyed, without fault on the part of the assessee, by a major
misfortune or calamity, upon the application of the assessee or upon
the action of the county assessor with the board's approval.  With
respect to certain counties that have adopted reassessment ordinances
and have been declared by the Governor to be in a state of disaster
as a result of certain events, existing law provides for state
allocations of the estimated amounts of the reductions in property
tax revenues resulting in certain fiscal years from reassessments
under those ordinances.  Existing law also continuously appropriates,
without regard to fiscal years, moneys in the Special Fund for
Economic Uncertainties for purposes of funding these state
allocations.
   This bill would provide for similar state allocations with respect
to property tax revenue reductions, resulting from a reassessment
ordinance, incurred by a county that was declared by the Governor to
be in a state of disaster as a result of a freeze occurring in
California in the winter of 1998-99.  By requiring moneys
continuously appropriated from the Special Fund for Economic
Uncertainties to be allocated for the new purpose of reimbursing
these counties for these property tax revenue reductions, this bill
would make an appropriation.
   The Personal Income Tax Law and the Bank and Corporation Tax Law
provide for the carryover to specified taxable or income years of
specified losses sustained as a result of various disasters occurring
in California in an area determined by the President of the United
States to warrant specified federal assistance, or proclaimed by the
Governor to be in a state of disaster.
   This bill would extend these provisions to losses sustained as a
result of a freeze or any other related casualty that occurred in
California in the winter of 1998-99.  This bill would also authorize
a taxpayer to make an election to claim a deduction for those losses
on the tax return for the preceding year.
   This bill would contain legislative findings and declarations as
to the statewide public purpose of this bill.
  This bill would declare that it is to take effect immediately as an
urgency statute.
   Appropriation:  yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 195.83 is added to the Revenue and Taxation
Code, to read:
   195.83.  In the 1998-99 fiscal year, the county auditor of an
eligible county, proclaimed by the Governor to be in a state of
disaster as a result of a freeze or any other related casualty that
occurred in that county during the winter of 1998-99, shall certify
to the Director of Finance an estimate of the total amount of the
reduction in property tax revenues on both the regular secured roll
and the supplemental roll for the 1998-99 fiscal year resulting from
the reassessment by the county assessor pursuant to paragraph (1) of
subdivision (a) of Section 170 of those properties that are eligible
properties as a result of that disaster, except that the amount
certified shall not include any estimated property tax revenue
reductions to school districts (other than basic state aid school
districts) and county offices of education.  For purposes of this
section, "basic state aid school district" means any school district
that does not receive a state apportionment pursuant to subdivision
(h) of Section 42238 of the Education Code, but receives from the
state only a basic apportionment pursuant to Section 6 of Article IX
of the California Constitution.
  SEC. 2.  Section 195.84 is added to the Revenue and Taxation Code,
to read:
   195.84.  After the county auditor of an eligible county, as
described in Section 195.83, has made the applicable certification to
the Director of Finance pursuant to that section, the director
shall, within 30 days after verification of the county auditor's
estimate, certify this amount to the Controller for allocation to the
county.  Upon receipt of certification from the Director of Finance,
the Controller shall make the appropriate allocation to the county
within 10 working days thereafter.
  SEC. 3.  Section 195.85 is added to the Revenue and Taxation Code,
to read:
   195.85.  On or before June 30, 2000, each eligible county, as
described in Section 195.83, shall compute and remit to the
Controller for deposit in the General Fund an amount equal to the
amount allocated to it by the Controller pursuant to Section 195.84,
less the actual amount of its property tax revenue lost on the
regular secured and supplemental rolls with respect to those eligible
properties described in Section 195.83 as a result of the
reassessment of those properties pursuant to paragraph (1) of
subdivision (a) of Section 170, excluding any property tax revenue
lost by school districts (other than basic state aid school
districts) and county offices of education.  If the actual amount of
property tax revenue lost by an eligible county in the immediately
preceding fiscal year, as described and limited in the preceding
sentence, exceeds the amount allocated by the Controller to that
county pursuant to Section 195.84, the Controller shall allocate the
amount of that excess to that eligible county.  For purposes of this
section, "basic state aid school district" means any school district
that does not receive a state apportionment pursuant to subdivision
(h) of Section 42238 of the Education Code, but receives from the
state only a basic apportionment pursuant to Section 6 of Article IX
of the California Constitution.
  SEC. 4.  Section 17207 of the Revenue and Taxation Code is amended
to read:
   17207.  (a) An excess disaster loss, as defined in subdivision
(c), shall be carried to other taxable years as provided in
subdivision (b), with respect to losses resulting from any of the
following disasters:
   (1) Forest fire or any other related casualty occurring in 1985 in
California.
   (2) Storm, flooding, or any other related casualty occurring in
1986 in California.
   (3) Any loss sustained during 1987 as a result of a forest fire or
any other related casualty.
   (4) Earthquake, aftershock, or any other related casualty
occurring in 1987 in California.
   (5) Earthquake, aftershock, or any other related casualty
occurring in 1989 in California.
   (6) Any loss sustained during 1990 as a result of fire or any
other related casualty in California.
   (7) Any loss sustained as a result of the Oakland/Berkeley Fire of
1991, or any other related casualty.
   (8) Any loss sustained as a result of storm, flooding, or any
other related casualty occurring in February 1992 in California.
   (9) Earthquake, aftershock, or any other related casualty
occurring in April 1992 in the County of Humboldt.
   (10) Riots, arson, or any other related casualty occurring in
April or May 1992 in California.
   (11) Any loss sustained as a result of the earthquakes that
occurred in the County of San Bernardino in June and July of 1992, or
any other related casualty.
   (12) Any loss sustained as a result of the Fountain Fire that
occurred in the County of Shasta, or as a result of either of the
fires in the Counties of Calaveras and Trinity that occurred in
August 1992, or any other related casualty.
   (13) Any loss sustained as a result of storm, flooding, or any
other related casualty that occurred in the Counties of Alpine,
Contra Costa, Fresno, Humboldt, Imperial, Lassen, Los Angeles,
Madera, Mendocino, Modoc, Monterey, Napa, Orange, Plumas, Riverside,
San Bernardino, San Diego, Santa Barbara, Sierra, Siskiyou, Sonoma,
Tehama, Trinity, and Tulare, and the City of Fillmore in January
1993.
   (14) Any loss sustained as a result of a fire that occurred in the
Counties of Los Angeles, Orange, Riverside, San Bernardino, San
Diego, and Ventura, during October or November of 1993, or any other
related casualty.
   (15) Any loss sustained as a result of the earthquake,
aftershocks, or any other related casualty that occurred in the
Counties of Los Angeles, Orange, and Ventura on or after January 17,
1994.
   (16) Any loss sustained as a result of a fire that occurred in the
County of San Luis Obispo during August of 1994, or any other
related casualty.
   (17) Any loss sustained as a result of the storms or flooding
occurring in 1995, or any other related casualty, sustained in any
county of this state subject to a disaster declaration with respect
to the storms and flooding.
   (18) Any loss sustained as a result of the storms or flooding
occurring in December 1996 or January 1997, or any related casualty,
sustained in any county of this state subject to a disaster
declaration with respect to the storms or flooding.
   (19) Any loss sustained as a result of the storms or flooding
occurring in February 1998, or any related casualty, sustained in any
county of this state subject to a disaster declaration with respect
to the storms or flooding.
   (20) Any loss sustained as a result of a freeze occurring in the
winter of 1998-99, or any related casualty, sustained in any county
of this state subject to a disaster declaration with respect to the
freeze.
   (b) (1) In the case of any loss allowed under Section 165(c) of
the Internal Revenue Code, relating to limitation of losses of
individuals, any excess disaster loss shall be carried forward to
each of the five taxable years following the taxable year for which
the loss is claimed.  However, if there is any excess disaster loss
remaining after the five-year period, then 50 percent of that excess
disaster loss shall be carried forward to each of the next 10 taxable
years.
   (2) The entire amount of any excess disaster loss as defined in
subdivision (c) shall be carried to the earliest of the taxable years
to which, by reason of subdivision (b), the loss may be carried.
The portion of the loss which shall be carried to each of the other
taxable years shall be the excess, if any, of the amount of excess
disaster loss over the sum of the adjusted taxable income for each of
the prior taxable years to which that excess disaster loss is
carried.
   (c) "Excess disaster loss" means a disaster loss computed pursuant
to Section 165 of the Internal Revenue Code which exceeds the
adjusted taxable income of the year of loss or, if the election under
Section 165(i) of the Internal Revenue Code is made, the adjusted
taxable income of the year preceding the loss.
   (d) The provisions of this section and Section 165(i) of the
Internal Revenue Code shall be applicable to any of the losses listed
in subdivision (a) sustained in any county or city in this state
which was proclaimed by the Governor to be in a state of disaster.
   (e) Losses allowable under this section may not be taken into
account in computing a net operating loss deduction under Section 172
of the Internal Revenue Code.
   (f) For purposes of this section, "adjusted taxable income" shall
be defined by Section 1212(b)(2)(B) of the Internal Revenue Code.
   (g) For losses described in paragraphs (15), (16), (17), (18),
(19), and (20) of subdivision (a), the election under Section 165(i)
of the Internal Revenue Code may be made on a return or amended
return filed on or before the due date of the return (determined with
regard to extension) for the taxable year in which the disaster
occurred.
  SEC. 5.  Section 24347.5 of the Revenue and Taxation Code is
amended to read:
   24347.5.  (a) An excess disaster loss, as defined in subdivision
(c), shall be carried to other income years as provided in
subdivision (b), with respect to losses resulting from any of the
following disasters:
   (1) Forest fire or any other related casualty occurring in 1985 in
California.
   (2) Storm, flooding, or any other related casualty occurring in
1986 in California.
   (3) Any loss sustained during 1987 as a result of a forest fire or
any other related casualty.
   (4) Earthquake, aftershock, or any other related casualty
occurring in October 1987 in California.
   (5) Earthquake, aftershock, or any other related casualty
occurring in October 1989 in California.
   (6) Any loss sustained during 1990 as a result of fire or any
other related casualty in California.
   (7) Any loss sustained as a result of the Oakland/Berkeley Fire of
1991, or any other related casualty.
   (8) Any loss sustained as a result of storm, flooding, or any
other related casualty occurring in February 1992 in California.
   (9) Earthquake, aftershock, or any other related casualty
occurring in April 1992 in the County of Humboldt.
   (10) Riots, arson, or any other related casualty occurring in
April or May 1992 in California.
   (11) Any loss sustained as a result of the earthquakes or any
other related casualty that occurred in the County of San Bernardino
in June and July of 1992.
   (12) Any loss sustained as a result of the Fountain Fire that
occurred in the County of Shasta, or as a result of either of the
fires in the Counties of Calaveras and Trinity that occurred in
August 1992, or any other related casualty.
   (13) Any loss sustained as a result of storm, flooding, or any
other related casualty that occurred in the Counties of Alpine,
Contra Costa, Fresno, Humboldt, Imperial, Lassen, Los Angeles,
Madera, Mendocino, Modoc, Monterey, Napa, Orange, Plumas, Riverside,
San Bernardino, San Diego, Santa Barbara, Sierra, Siskiyou, Sonoma,
Tehama, Trinity, and Tulare, and the City of Fillmore in January
1993.
   (14) Any loss sustained as a result of a fire that occurred in the
Counties of Los Angeles, Orange, Riverside, San Bernardino, San
Diego, and Ventura, during October or November of 1993, or any other
related casualty.
   (15) Any loss sustained as a result of the earthquake,
aftershocks, or any other related casualty that occurred in the
Counties of Los Angeles, Orange, and Ventura on or after January 17,
1994.
   (16) Any loss sustained as a result of a fire that occurred in the
County of San Luis Obispo during August of 1994, or any other
related casualty.
   (17) Any loss sustained as a result of the storms or flooding
occurring in 1995, or any other related casualty, sustained in any
county of this state subject to a disaster declaration with respect
to the storms and flooding.
   (18) Any loss sustained as a result of the storms or flooding
occurring in December 1996 or January 1997, or any related casualty,
sustained in any county of this state subject to a disaster
declaration with respect to the storms or flooding.
   (19) Any loss sustained as a result of the storms or flooding
occurring in February 1998, or any related casualty, sustained in any
county of this state subject to a disaster declaration with respect
to the storms or flooding.
   (20) Any loss sustained as a result of a freeze occurring in the
winter of 1998-99, or any related casualty, sustained in any county
of this state subject to a disaster declaration with respect to the
freeze.
   (b) (1) In the case of any loss allowed under Section 165 of the
Internal Revenue Code, relating to losses, any excess disaster loss
shall be carried forward to each of the five income years following
the income year for which the loss is claimed.  However, if there is
any excess disaster loss remaining after the five-year period, then
50 percent of that excess disaster loss shall be carried forward to
each of the next 10 income years.
   (2) The entire amount of any excess disaster loss as defined in
subdivision (c) shall be carried to the earliest of the income years
to which, by reason of subdivision (b), the loss may be carried.  The
portion of the loss which shall be carried to each of the other
income years shall be the excess, if any, of the amount of excess
disaster loss over the sum of the net income for each of the prior
income years to which that excess disaster loss is carried.
   (c) "Excess disaster loss" means a disaster loss computed pursuant
to Section 165 of the Internal Revenue Code, which exceeds the net
income of the year of loss or, if the election under Section 165(i)
of the Internal Revenue Code is made, the net income of the year
preceding the loss.
   (d) The provisions of this section and Section 165(i) of the
Internal Revenue Code shall be applicable to any of the losses listed
in subdivision (a) sustained in any county or city in this state
which was proclaimed by the Governor to be in a state of disaster.
   (e) Any corporation subject to the provisions of Section 25101 or
25101.15 that has disaster losses pursuant to this section, shall
determine the excess disaster loss to be carried to other income
years under the principles specified in Section 25108 relating to net
operating losses.
   (f) Losses allowable under this section may not be taken into
account in computing a net operating loss deduction under Section 172
of the Internal Revenue Code.
   (g) For losses described in paragraphs (15), (16), (17), (18),
(19), and (20) of subdivision (a), the election under Section 165(i)
of the Internal Revenue Code may be made on a return or amended
return filed on or before the due date of the return (determined with
regard to extension) for the income year in which the disaster
occurred.
  SEC. 6.  The Legislature finds and declares that this act fulfills
a statewide public purpose because of both of the following:
   (a) The Governor of California has officially proclaimed that the
freeze that occurred in California during the winter of 1998-99 was a
disaster, thus qualifying affected persons for various forms of
governmental assistance and relief.
   (b) This act is consistent with and supplements the proclaimed
disaster relief by providing necessary fiscal assistance and tax
relief to affected jurisdictions and persons to allow them to
maintain essential basic services and repair damage to, and restore,
their homes and businesses.
  SEC. 7.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   In order to timely provide essential relief to those persons and
jurisdictions who have suffered damage or loss as a result of the
freeze that occurred in California during the winter of 1998-99, it
is necessary that this act take effect immediately.
